Please see this question on superuser.com: What does the “Hide pointer while typing” feature actually do?

And the accepted answer, that gives great technical details.

So, in Windows I have unchecked this setting, so that the cursor is always displayed. (the cursor constantly disappearing/reappearing while typing is quite annoying...)

Apparently, Notepad++ currently ignores the setting. To test it, open a search window and note the disappearing cursor while typing in the "Find what" input.

(as a side note, Windows Notepad itself doesn't honor the setting...)

Platform: Windows 7 64-bit, Notepad++ 7.4.2 32-bit